A senior Hamas leader in the Gaza Strip on Sunday denied press reports that Egypt had frozen all contacts with the Islamic movement. "There is no alienation between us and the Egyptians -- on the contrary, we are in ongoing contact with the Egyptian administration," Dr. Mahmoud Zahar was quoted as saying by Xinhua.

Zahar said there were differences between Hamas and Cairo, "but they don't go beyond the context of the reconciliation paper" that Egypt presented last year to end Hamas' power-struggle against President Mahmoud Abbas' Fatah party. Hamas refused to sign the Egyptian offer and raised a series of reservations that Cairo has rejected.

"With the completion of the reconciliation process, the good relations with Egypt would be restored again," Zahar said.

Earlier on Sunday, the Kuwaiti al Dar newspaper reported that Egypt decided to sever all its relations with Hamas. It said that Egypt made its decision in response to statements by several Hamas leaders which Cairo had considered insulting.